Export

Indian government lifts then reimposes pea import ban

Henry Wells, August 31, 2018

THE global pulse trade is struggling for clear direction following mixed messages from India, according to traders who have received precisely opposite intelligence from the Indian Government this week.

The announcement was shaping us a game-changer for Canada, Europe and Black Sea exporters, striving to give structure and predictability to sales of new-crop peas, before hopes of a lift in the ban were dashed.

The news has caused importers across the Middle East to adopt a more risk-averse approach to their own transactions because India’s actions, every time, affect market price significantly.

On the one hand the previous import restriction could be explained as an effort to promote clearance of home-grown and imported stock in India.

“It was really to stimulate demand and hold prices at levels closer to the minimum support price (MSP),” Mr Brealey said.

On the other hand, it appeared that the ban presently in place would likely be extended beyond its expiry date of 30 September 2018, according to Mr Brealey.

“Over the years, trade in yellow peas in particular has gone from practically nothing to India in recent years importing between 2.5 and 3 million tonnes, at the same time as yellow pea production increased in the Black Sea region and to a lesser degree Canada and the US.”

Market disruption

The fact that yellow peas are cheaper than other pulses, including chickpeas, allowed them to capture market in India, because the economics made sense.

“That increased supply of yellow peas has taken away from chana or chickpea demand.

“By banning imports of yellow peas, it effectively stops the usage and pushes that demand back to other products, particularly chana.”

Traders said the impact of India’s policies is impacting the global as well as its domestic market.

Consumers and buyers in Pakistan, Iran, Iraq and the UAE have no confidence to buy forward, and are only willing to buy hand-to-mouth.

“It creates so much uncertainty not only in the market in India but elsewhere around the world.

“The buyers of pulses in Pakistan and into the Middle East and Bangladesh all lose confidence because they don’t know what the next move from the government will be.”